Professional Documents
Culture Documents
$XX,XXX
X,XXX
XX,XXX
XX,XXX
XX,XXX
X,XXX
XX,XXX
$XX,XXX
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Subtract
Gains of Sale of Plant, Property, or Equipment
The total proceeds (cash received for the sale of assets) from the sale of assets will be
recorded in the investing section of the cash flow statement. The amounts for
depreciation, amortization and losses/gains on disposal are placed in the middle
column. Remember if the depreciation is included in a larger item on the income
statement it can be deduced by creating a t-account. Take from the balance sheet the
beginning balance of accumulated depreciation subtract any accumulated depreciation
for the disposal of an asset and then subtract that amount from the ending balance to
get the amount of depreciation for the current year.
5. Next on the list is current assets, these items can either increase or decrease in amount
over the year. Current assets are: Accounts receivable, Merchandise inventory, and
prepaid expenses. Cash is not included in this list because it will be used at the end of
the statement. The amounts are placed in the middle column.
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Current Assets
Current Liabilities
Increases
Subtract
Add
Decreases
Add
Subtract
7. Total up all of the pluses and minuses values and place the total on the same line as the
last liability with the amount in the far right hand column.
8. Depending on where the amount is positive or negative either add or subtract the total
from the net income to get Net cash provided by operating activities.
Minus
Purchase of equipment
Purchase of investment
Place the dollar amounts in the middle column. Any items in the minus column of the
above chart will have brackets surrounding their dollar amounts.
3. Finally, for this section total the entire sales minus all of the purchases to get the results
of this section. Place the title Net cash provided by investing activities if the result is
positive or if the result is negative use the title Net cash used by investing activities.
The resulting dollar amount is place in the right column.
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Minus
Purchase of Treasury Stock
Redemption of bonds or notes
Payment of dividends
3. Finally, for this section total all of the sales minus all of the purchases, redemptions, and
payments to get the results of this section. Use the title Net cash provided by financing
activities if the result is positive or if the result is negative use the title Net cash used by
financing activities. Place the title in the left column. The resulting dollar amount is
place in the right column.
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